The Coasian trick, in steps

Systematically identify and remove transaction costs.
Then minimize the generator, close the loops and complete the sequence.
Repeat, and you obtain the generator that taps around a hard bound.

Classic case is the small state problem. Look at the posts from ten years, collect all discoveries. We rejected solutions, transaction costs to high. That discovery subselects, we discussed other solutions, had a ballot, took surveys. That led to high transaction costs.

Whats left, roll up the earmarks, up the chain and to the Constitutional bargain in tune with Congressional budgets. We have actually 'Huffman coded' the Constitution against programs. We have to quantize the small states, build the minimal generator found, the most efficient.

It is almost already voted, it is down to one fairly bet number balanced against interest costs. We know where the pit action is going to be, informally or formally, it is the agreement on terms between Senate and House which happens anyway. It is happening now, the accountants are all sandbox, they will select a guestimate for that number, and it gets spread around the senators like a large stock option deal for their states.

Find and reduce (in the model)  ttansaction costs, then look at the whitening process in the credit or goods flow.  Identify a constraining channel.

The method provides two paths, 1) the unique, current, optimal inventory distribution, and 2) A sharp lead into the digitization of process.

We get three generators. A sequence of Senate management expenses plus interest expenses. A sequence of program expenses. And a sequence of itax payments. After the channel limit is adjusted,  the swap is made. All sequences will co-adapt, especially Senate management which wants to reduce redundancy in the system. The House wants to cooperate, the Senate essentially insures continuity in the programs. Then the tax payer has to make the payment stream. Under the incentive system, the Senate will take some risk but have huge options for gain, on a budget by budget basis. The three streams will fit nicely.

Wealth increases to the states, large and small, who send the best government managers to the Senate. If the small states begin solving bottlenecks, volatility in California reduces and California can hold out for a better swap price, smaller insurance payment to the Senate.. 

Smaller states making bucks will attract the crowds pretty fast. Their small state advantage balances.  They are not interested in sudden stops, raises transaction costs and cuts their small state bonus. But the knowledge of sound government management remains Pareto efficient all around, all the time.

We dump the primary dealer system, which is getting fronted and useless anyway. The senators keep the programs balanced, the programs run a cash flow system. In fact, we don't even need the NY Fed. Transactions costs will drop all around, and our Senators will earn their states money or productivity.